growth constant currency statutory · 2017-05-04 · growth constant currency statutory revenue...
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Growth Constant Currency Statutory
Revenue 4.7% 4.1%
EBITDA 4.9%* 3.6%
Net profit 7.1% 6.0%
Earnings per share 5.5% 4.5%
Constant currency = FY ‘13 results restated
using FY ‘12 currency exchange rates
* 4.5% EBITDA growth after expensing $2.5 million implementation costs of US cost-out initiative
‣ Dividend franked to 45%
‣ Record Date 4 September 2013
‣ Payment Date 24 September 2013
‣ Dividend Reinvestment Plan suspended
FY ‘13 FY ‘12 Growth
Interim Dividend $0.25 $0.24 4%
Final Dividend $0.37 $0.35 6%
TOTAL Dividend $0.62 $0.59 5%
‣ Gearing ratio = Net debt / Net debt + equity (bank covenant limit <55%)
‣ Interest cover = EBITA / Net interest expense (bank covenant limit >3.25)
‣ Debt cover = Net debt / EBITDA (bank covenant limit <3.5)
‣ Formulas as per bank facility definitions
30 June ‘13 30 June ‘12
Net interest-bearing debt A$M 1,739 1,571
Gearing ratio % 37.3 37.6
Interest cover X 8.6 7.0
Debt cover X 2.4 2.5
‣ Available headroom >$400 million post Labco acquisition
‣ Increased net debt due to weaker AUD
‣ EBITDA growth of approximately 5%
‣ Guidance based on constant currency rates (FY ‘13 FX rates)
‣ Equates to approximately 11% growth at current exchange rates
‣ Includes estimated impacts of possible FY ’14 fee adjustments in Australia,
Germany, Belgium and the USA
‣ Excludes Labco and future acquisitions
‣ Interest and tax guidance
‣ Interest expense to decrease ~10% (constant currency)
‣ Effective tax rate FY ’14 expected to be ~25%
‣ Results tracking in line with guidance after 4 months of FY ’14
‣ Cost-out programs on track
‣ USA: ongoing positive organic volume growth
Shareholder Update
‣ Unconventional story
‣ Customised corporate philosophy
‣ Unusual corporate structure
‣ From small lab in Top Ryde, Sydney…
‣ …to annual revenues of $3.5 billion
‣ …employing 26,000 people
‣ …in 3 continents
‣ …market leader in Australia and Germany
‣ …No. 3 player in the USA
‣ Top 50 ASX company
‣ Market cap ~$6.5 billion
Pathology
78%
Radiology
12%
IPN
10%
‣ Established in 1987 ‣ Sonic acquires Douglass Laboratories (revenues A$13 million p.a.)
‣ Pathology market fragmented, cottage industry
‣ 1992-1993 ‣ Takeover offer for Sonic (at $0.15 per share)
‣ New majority owner, new Board, new management
‣ 1994-1998 ‣ Series of acquisitions in NSW, SA and ACT
‣ Formation of Douglass Hanly Moir Pathology
‣ 1999 ‣ Turning point for company
‣ SGS Group acquisition
‣ Sonic becomes largest pathology company in Australia
‣ Revenue from ~$175 million to ~$475 million p.a.
‣ Established in 1987 ‣ Single pathology lab in Sydney (Douglass Laboratories)
‣ Pathology market fragmented
‣ 1992-1993 ‣ Takeover offer for Sonic @ $0.15 per share
‣ New majority owner, new Board, new management
‣ Appointment of (unsuspecting) pathologist as CEO of Sonic!
‣ Why a pathologist? ‣ Pathology is the backbone of medicine
‣ Customers are doctors: GPs and specialists
‣ Key staff: Pathologists and lab scientists
‣ Success in pathology ‣ Resonance with customers to drive revenue
‣ Resonance with key staff to drive quality, efficiency and productivity
‣ Medical Leadership model: Keeping the business “medical”
Australian Pathology
31%
• FY’13 revenue A$1,067 million
• 9,200 employed staff
‣ Consensus and unity achieved
‣ Business model
‣ Corporate structure
‣ Business philosophy
‣ Outcomes
‣ Core Values
‣ Medical Leadership
‣ Federated structure
The Sonic Difference
SonicConnect
A dedicated Sonic department
To connect Sonic’s people globally
To promote The Sonic Difference
SYNERGIES
• Procurement
• Benchmarking
• IT
• E-Health
• Shared marketing
• Quality Systems
• Leadership Training
• Centralisation
• Lab design / workflow
• Collegiate interaction
• Shared culture & values
Major brand names retained
Local management autonomy
Local ‘flavour’ preserved
Staff morale enhanced
Revenue fallout minimised
Synergy capture facilitated
Clinpath
Clinipath
DHM
S.IML
Capital
DSPL
SNP
MP Sonic
Soni
c
Epworth Radiology
. Sonic
Imaging 12%
FY’13 revenue A$404 million
2,300 employed staff
‣ Sonic’s position in Australian pathology ‣ Market leader
‣ ~35% market share
‣ Further acquisitional growth limited
‣ Proven, successful model ‣ Core Values
‣ Medical Leadership
‣ Federated management structure
‣ Analysis of off-shore pathology markets ‣ Would the Sonic model succeed in overseas markets?
‣ Why do Australian companies fail in overseas markets?
‣ Strict criteria used to determine country suitability and risks
‣ UK, Germany, USA identified as suitable opportunities for Sonic
‣ 2002 – UK
‣ 2004 – Germany
‣ 2005 – USA
‣ 2007 – Switzerland
‣ 2010 – Belgium, Ireland
IPN - Medical centres and occupational
health services in Australia
Australia $1,067 31%
USA $749 21%
Germany $565 16%
UK & Ireland $148 4%
Belgium $98 3%
Switzerland $77 2%
New Zealand $41 1% Imaging
$404 12%
IPN $332
10%
Statutory revenue in A$ million
Australia Germany USA
USA 21%
• FY’13 revenue A$749 million
• 6,000 employed staff
• Head Office: Austin, Texas
V
Alabama
Arizona Arkansas
California Colorado
CT
Florida
Georgia
Idaho
Illinois Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Mass.
Michigan
Minnesota
Miss.
Missouri
Montana
Nebraska Nevada
NH
NJ
New Mexico
New York
N. Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
S. Carolina
South Dakota
Tennessee
Texas
Utah
Virginia
Washington
W. Va.
Wisconsin
Wyoming
Hawaii
Hawaii
Germany 16%
• FY’13 revenue A$565 million
• 4,000 employed staff
• Head Office: Berlin
Sonic Healthcare Germany
Laboratory locations
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Labco HQ
Giessen
Duisburg
Saarbrücken
Karlsruhe
Dillenburg
Sonic laboratory sites
Labco sites
Customisation of
services
Lab-clinician
relationships
High quality reports
E-products
Value-added services
Customer service
Sonic Core Values
Care for our people
Staff feeling valued
Long service
Workplace safety
Employer of choice
Promote culture
Accuracy
Turnaround times
Technical excellence
Innovation
In-house IT solutions
Modern systems
Modern equipment
Modern facilities
Experts in field
Leaders in field
Centres of
excellence
Environment
Community care
Charities
Corporate Citizen
HEAL Africa
Environment
Community
care
Charities
Corporate
Citizen
HEAL Africa
Clinpath
Clinipath
DHM
S.IML
Capital
DSPL
SNP
MP Soni
c
“One of the most underprivileged areas in the world”
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Building on our solid foundation…
For future success
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Best
Service
Financial
Drivers
Passion
Respect for staff
Empathy with staff
Maintain medical focus
Focus on quality
Management integrity
Ethical practice
Culture
Values
‣ Pathology integral to healthcare system
‣ 70% of all medical diagnoses depend on pathology
‣ 100% of cancer diagnoses depend on pathology
‣ Strong underlying growth drivers
‣ Ageing of population
‣ New tests
‣ Genetic testing
‣ Preventative medicine – front end vs back end
‣ Funding
‣ Some fee cuts to curb growth
‣ Australia – industry growth cap
‣ USA – cuts to Medicare/Medicaid (~20% of Sonic’s US revenue)
‣ Germany – one-off caps imposed on statutory insurance revenue
(~50% of Sonic’s German revenue)
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‣ Staff first
‣ Preservation of strong culture and values
‣ Pursuit of quality, service and good medicine
‣ Our business is a force for good:
‣ We see millions of patients each year
‣ We perform millions of tests/examinations each year
‣ Our work is the backbone of the healthcare system
‣ We prevent, diagnose and monitor disease
‣ We improve the health of communities we serve
Sonic Healthcare Limited
2013 Annual General Meeting
Proxy Results
RESOLUTION FOR AGAINST OPEN OPEN TO
CHAIR ABSTAIN
1 Ms Kate Spargo
Re-election as Director 237,977,532 10,553,689 20,846,294 20,295,460 724,811
2 Dr Jane Wilson
Re-election as Director 240,550,603 8,388,624 20,852,889 20,297,455 310,210
3 Dr Philip Dubois
Re-election as Director 151,747,689 97,180,405 20,858,471 20,295,112 315,761
4 Adoption of Remuneration
Report 237,208,773 9,652,542 20,827,175 20,288,063 1,949,765